The US in return offered to help the North build a whole new technology for nuclear power generation. The offer includes scrapping the North's graphite-moderated reactors for water-moderated reactors, which cannot be easily used to extract bomb-grade nuclear fuel.

But the US offer depends on Pyongyang being "in full compliance with its non-proliferation obligations," according to chief US negotiator Robert Gallucci.

Despite the US agreement to open these talks, it remains unclear why North Korea backed down from its refusal to allow IAEA inspections.

Last spring, it rejected an IAEA demand to probe two sites suspected of containing information that the North was producing bomb-grade plutonium. The North then threatened to pull out of the Nuclear Non-Proliferation Treaty (NPT), which the IAEA enforces.

On a visit to South Korea this month, President Clinton warned the North that if it ever used nuclear weapons, "it would be the end of their country."

But a better reason for the North's reversal, say South Korean analysts, may be that it is worried that its closest ally, China, would no longer block a possible move by the United Nations to impose economic sanctions against the North for opposing the IAEA. China's leverage

China, which supplies most of the oil to the depressed North Korean economy, dropped its opposition to sanctions, South Korean officials say, after the US agreed to talk to the North.

The US and North Korea have also agreed to meet again within two months, which effectively sets a deadline for the North to allow IAEA inspections. The agency's board of governors is due to meet at that time, and they could then make a recommendation to the UN Security Council.

"The ball is in the North Korean court," says Park Young Kyu, director of policy studies at the government-affiliated Research Institute for National Unification in Seoul. "If the US thinks there is no progress, then it will cut off talks."

Both Japan and South Korea praised the compromise, but warned that the North still must resolve all problems related to its nuclear development.

The US opened the talks with Pyongyang in June to convince it to stay in the NPT. Such a withdrawal might have set a bad precedent for international efforts to prevent other nations from obtaining nuclear weapons. US officials have charged that the North might be able to finish making a nuclear weapon within a year.

At the first talks, the North agreed to "suspend" its withdrawal from the treaty. Then, in this latest round, North Korea said that it "agreed that full and impartial application of IAEA safeguards is essential to accomplish a strong and international non-proliferation regime."

"On this basis, [North Korea] is to prepare consultations on outstanding safeguards and other issues as soon as possible," it said.

One problem is that the North may still refuse IAEA inspections that it considers not to be "impartial." Pyongyang complained earlier this year that the US was influencing the IAEA inspections too much, by providing satellite photos of the nuclear complex at Yongbyon, north of Pyongyang, for instance.

"North Korea can still argue over many points just to buy time," says Dr. Park. But he says it appears that the North finally played its "nuclear card" to win some sort of US recognition. Both sides agreed that at the next meeting they would "lay the basis for improving overall relations." North's goals

"The North Koreans are using the nuclear card, and they think it has been successful," Park said.

"Their major goal has been to normalize relations with the US and then with Japan." Apparently North Korea has temporarily shelved its demands in the talks, such as the US withdrawing its nuclear defense of South Korea.

Pyongyang also agreed to restart talks with South Korea, which it canceled last year after the US and the South went ahead with a joint military exercise.

The two Koreas had signed historic reconciliation agreements in December 1991, but none of them have been implemented. The most important agreement from Seoul's perspective is one calling for mutual inspections of suspected nuclear sites to supplement the inspections of the IAEA.

In recent weeks, the North has tried to avoid discussing the agreements by proposing a whole new set of talks between envoys of each country's presidents.